Louisville CPA tips: Expenses from Job Searching can be Deductible

If you are like the many Americans out searching for a job you probably already know how quickly all those little costs related to the search can add up. Luckily there are some job hunting expenses that can be deducted on your upcoming tax return. However there are some requirements you must meet in order to qualify for the deductions.

In order to deduct your job search expenses you have to be looking for a job in your previous field. For example you can’t claim deductions while looking for a managerial position in retail if you worked in the food industry before becoming unemployed.

You can deduct any fees that you paid in order to get the job. For example paying a fee to a job placement agency to help you land a new job in your previous job field. However if your new employer pays you back then you can’t deduct the amount you paid and may have to report that in your income.

Deduct any expenses you incur while preparing and mailing your resume to a prospective employer in the same field as your last employer. This includes a professional resume service stamps envelops the paper you used to print the resume on etc.

If you have taken a long sabbatical in between jobs you can’t deduct your expenses even if you are looking for a job in a similar job you had before.

You are ineligible for deducting expenses if you are looking for your first job like recent graduates.

Be very careful when deducting travel expenses. These can be tricky because it’s difficult to determine what a business expense is versus what a personal expense is. Mileage or gas/actual expenses used to go to interviews is an acceptable deduction; taking a three week trip to Hawaii isn’t.

Expenses incurred while job hunting are considered miscellaneous itemized deductions and must exceed 2% of your AGI when combined with all your other itemized deductions to be eligible for deduction. For more information on this call Lindemeyer CPA to discuss your situation.

If you are looking for a job or have recently found a job make sure to claim all of the expenses you paid out of pocket on your upcoming taxes. Meeting these requirements is only the first step; talk to your Louisville CPA to make sure you are getting the full benefit of these deductions.

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